Median Household Income Rose In 2015

It looks like 2015 was finally a good year for middle class incomes. Early estimates are that the median household income in the US grew by a pretty robust 3.8% in 2015 which would push income up to around $55,600 from 2014’s $53,657. More importantly, the rise in income in 2015 far outstripped the anemic inflation rate. Inflation grew 0.1% in 2015, primarily due to plummeting energy costs. But even if food and energy are excluded (which are actually of primary importance to households), the inflation rate only came in at 1.8%, still well below the 3.8% in income growth. This means that households’ purchasing power finally increased in 2015. Of course, median household income is still far below the $57,724 number as recently as 2000 and inflation has ticked up quite a bit since then as well. So, although purchasing power still remains far below the levels we had in the 1990s, at least they are finally headed in the right direction. Of course, there are people at the Federal Reserve who want to make sure they nip this increasing purchase power of American families in the bud. For them, it’s time for a rate increase.